Linux operating system and open source middleware vendor Red Hat last week reported more than 30% growth in its total revenue and its critical subscription revenue for its financial year 2008.
Red Hat's financial year, which ended 29 Febraury, was highlighted by total revenue of US$523 million, an increase of 31% over revenue posted in financial 2007. Its subscription revenue, which is amassed from support licenses, was $449.8 million, a 32% increase over 2007. Net income for the financial year was up 28%, from $59.9 million to $76.7 million.
Red Hat CEO Jim Whitehurst, who joined the company in January, said his priorities in financial year 2009 would be continued penetration into the corporate datacentre using Red Hat middleware and the Linux operating system. He said the company would invest in staffing, technology development and partner recruitment.
The company's earnings report showed spending on research and development in 2008 was up 37% over 2007, from $71 million to 97.4 million.
Whitehurst said on the earnings call that Red Hat is well positioned despite current economic woes because the company helps drive costs out of IT infrastructure.
The financial fourth quarter was Whitehurst's first quarter as Red Hat CEO. He said in January that 90% of his job would focus on execution of Red Hat's established core Linux and datacentre platform strategies.
The company reported strong business growth around JBoss but did not provide numbers to define the progress. Last year, Wall Street was critical of Red Hat's growth with its JBoss business, which anchors its new middleware strategy.
Whitehurst said in January his plan is to take Red Hat from a company that posted less than $500 million in revenue in 2007 to a billion-dollar revenue peak by 2011. For the financial fourth quarter, which also ended Feb. 29, total revenue was up 27% over the same quarter a year ago to $141.5 million.
The earnings aligned with expectations of analysts polled by Thomson Financial, who projected revenue of $141.1 million.
Subscription revenue for the financial fourth quarter was $121.9 million, up 27% over the same quarter a year ago and 5% over financial 2008's third quarter.
In the quarter, net income was up just more than 8% from $20.3 million to $22 million.
The company also announced that during the quarter it had repurchased approximately 3.7 million shares of its common stock for $66 million.
Red Hat is planning to hold its fourth annual conference June 18-20 in Boston.